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Kentucky Life and Health Insurance Exam (New Update) Questions and Verified ANSWERs| 100 % Correct| Grade A
Question: The premiums paid by an employer for his employee's
group life insurance are usually considered to be
ANSWER: Tax-deductible to the employer
Question: Which of these is NOT considered to be a cost
connected with an individual's death?Options: [Implied: Business expenses, Funeral expenses, Estate taxes, Medical expenses]
ANSWER: Business expenses
Question: These are all accurate statements regarding universal
life insurance EXCEPT Options: [Implied: Policy loans are not permitted, Flexible premiums, Adjustable death benefit, Cash value growth]
ANSWER: Policy loans are not permitted
Question: Which of these is NOT relevant when determining the
amount of personal life insurance needed?
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Options: [Implied: Local unemployment rate, Income, Dependents, Debts]
ANSWER: Local unemployment rate
Question: Who elects the governing body of a mutual insurance
company?
ANSWER: Policyholders
Question: Why would evidence of insurability be required for a
person insured with a variable universal life policy?
ANSWER: The face amount is increased
Question: At what point are death proceeds paid in a joint life
policy?
ANSWER: When the first insured dies
Question: What is considered a valid reason for small businesses
to insure the lives of its major shareholders?
ANSWER: Fund a buy-sell agreement
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Question: Which action will trigger a penalty tax on premature
distributions from a modified endowment contract (MEC)?
ANSWER: Policy loans
Question: Dividends from a mutual insurance company are paid
to whom?
ANSWER: Policyowners
Question: Traditional individual retirement annuity (IRA)
distributions must start by
ANSWER: April 1st of the year following the year the
participant attains age 70 1/2
Question: How are Roth IRA distributions normally taxed?
ANSWER: Distributions are received tax-free
Question: How can an insurance company minimize exposure to
loss?
ANSWER: Reinsurance
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Question: All of the following statements about traditional
individual retirement accounts are false EXCEPT Options: [Implied: 10% penalty is applied to withdrawals before age 59 1/2, Contributions are always tax-free, Distributions are never taxable, No RMDs required]
ANSWER: 10% penalty is applied to withdrawals before age 59
1/2
Question: All of these statements concerning universal life
insurance are false EXCEPT Options: [Implied: Policy indicates how much of the premium is used toward company expenses, Premiums are fixed, No cash value, Death benefit cannot be adjusted]
ANSWER: Policy indicates how much of the premium is used
toward company expenses
Question: A 55 year old recently received a $30,000 distribution
from a previous employer's 401k plan, minus $10,000 withholding. Which federal taxes apply if none of the funds were rolled over?